TOMI Environmental Solutions, Inc. Q3 FY2024 earnings call

• TOMI achieved its second consecutive profitable quarter in 2024, with higher revenue, improved gross margins, and positive cash flow.
• Revenue for the quarter was $2.5 million, up 73% y-o-y, driven by mobile equipment (up 90% in 2024 vs 2023) and IHP service revenue ($650,000).
• International sales grew 82% in the first nine months of 2024, and BIT Solution sales increased 13% YTD.
• New partnerships and clients secured, including Integra LifeSciences, Curia, and food safety sector engagements.
• Custom integrations on track, with a California-based company nearing acceptance and a global lab services system in manufacturing.
• Entered the consumer healthcare market via partnerships with Edgewell Personal Care and Reckitt, Benckiser Group plc.
• Budget optimization included scaling back trade show activity and reallocating resources to lead generation strategies.
• Launched SPC program, a new on-demand disinfection service program, replacing the TOMI Service Network.

TOMI's consolidated net revenue for the third quarter of 2024 was $2,542,000, representing a 73% increase compared to the third quarter of the prior year. The growth was primarily driven by strong demand for mobile equipment, which increased by 90% in 2024 compared to 2023. IHP service revenue recognized approximately $650,000, a record for the division's quarterly performance. International sales for the first nine months of 2024 showed an 82% growth compared to 2023, and BIT Solution sales increased by 13% year-to-date. Mobile equipment contributed significantly to revenue growth, with IHP service revenue making up a notable portion of the segment performance.

• Hopes to do over $10 million in revenue for the year.
• Continues to focus on accelerating international growth, launching new products/programs, and carefully managing expenses.
• iHP service revenue pipeline exceeds $1 million, with opportunities expected to close by year-end.

Q: On iHP recurring revenues, how is visibility and repeatability?

A: The $600,000 CES pipeline starts next year, with some facilities' usage varying based on production lines; service contracts are repeatable and expected to grow.

Q: Outlook for food safety industry in 2025?

A: Excited about food safety industry with significant growth potential, engaging with FDA, USDA, Purdue University, and industry conferences.

Q: Sequential revenues in Q4?

A: Hopes to see sequential revenue increase, aiming for over $10 million for the year.

Q: Accounts receivable terms and inventory?

A: Majority of customers on net 30 for regular orders, custom-engineered systems have four payments as projects progress; inventory mostly includes finished equipment and bit solution.

Q: Lag times from hardware sales to bit solution sales?

A: Can vary, with some hardware sales taking a year for integration; next year should provide better KPIs.

Q: Awareness and education of products?

A: Focusing on lower-hanging fruit like food market processing, advertising, and studies; product useful for various industries including food suppliers.

Q: Use in hurricane-damaged IV plant?

A: Will be involved in decontamination after reconstruction.

Q: GLP-1 plants as an opportunity?

A: Could be an opportunity, as life sciences verticals make sense for SteraMist.

Q: Positioning on social media for disinfection issues?

A: Do a lot of work on Google SEO and social media, staying on top of contamination recalls.

Q: Transport product line sales and cycle?

A: Initial production sold, working on redesign with Canadian distributors, longer sales cycle.

Q: Ethylene oxide replacement market and certification?

A: Companies using ethylene oxide reaching out, but no specific details to discuss.

Q: Soma case study and partnership?

A: SPC program includes top remediators, product ideal for mold remediation.

Q: Discounts for customer names?

A: Do best to accommodate, but many large public companies don't want to endorse products.

Q: SIS stand-alone for biological safety cabinets?

A: Product in demand, ideal for BSCs and other enclosures, with potential across industries.